U.K. retail firms Tesco, J Sainsbury, Greggs and Waterstones, among others, have formed the Retail Jobs Alliance, a coalition that will push to eliminate the so-called Shops Tax, a business rate that has cut into retailers’ overheads for decades, and possibly replace it with an online sales tax.
The alliance — which also includes the Co-op Group, Kingfisher, Morrisons and several retail trade bodies — recently sent a letter to Chancellor of the Exchequer Rishi Sunak demanding an end to the shops tax, according to a Sky News report Tuesday (May 3).
The group said it was writing on behalf of organizations that employ more than 1 million people, or about one-third of the entire retail workforce. The organization said it wanted “an overall cut in business rates for all retail premises, and we are open to the possibility of funding this through the introduction of a new online sales tax (OST).”
U.K. retailers have been pushing for years to end the shops tax, especially as consumers’ shopping preferences have shifted increasingly to online channels. The creation of an online shopping tax to replace the shops tax could appease both sides in the debate, according to Sky News.
The Treasury began a study into the merits of an online tax in February after a business rates review showed that it would save retailers almost $8.8 billion.
“We are all, like you, acutely concerned with pressures on household budgets and the rising cost of living, and we all have a role to play in keeping costs down as far as we can,” the Retail Jobs Alliance wrote in its letter. “Business rates — the Shops Tax — are a significant part of retailers’ overheads.”